Cavuto: Give Us All a Break

Missed tonight's Cavuto ? Catch "The Deal" right here on FOXBusiness.com

Forget the credit.

Just take the cash.

Here's the deal:

What a deal!

No more paperwork, or annoying forms, no more waiting until you file your taxes to get that $8,000 tax credit.

Because now it's not a credit, it's cash.

Starting today, the Federal Housing Administration allowing the new home-buyer tax credit to be applied directly toward home purchase costs.

A down payment, if you will, courtesy Uncle Sam.

The National Association of Home Builders loving all this...says it'll stimulate 160,000 home sales across the country.

That got me wondering, right there.

Eight thousand bucks is going to make the difference for 160,000 folks to buy homes?

The same folks whose only obligation is to come up with a 3.5% down payment, so they can get the extra payment?

Didn't folks putting very little money down on homes get us into this nightmare with homes?

And now we're essentially paying them to do it all over again?

I'm not saying it won't put folks in homes.

I am saying it will put taxpayers footing the bill in a bind.

A big one.

Forget about those shopping for homes, what about those shopping for cars?

What's to stop them from asking, "Please, all I need is a thousand bucks and I could buy that Prius?"

Or..."I’d love to go to Orlando and help the economy, but not without a $500 check to help me first?"

Think about it.

If we're covering folks for a house, why not cover them for a car, or trip, or computer or pretty much anything they desire, now sensing they no longer have to save for those desires...The government will cut out the time and just cut them a check.

All I’m saying is cut us all a break.

There used to be a time in this country when you saved for big things.

Now you get a big check simply for desiring them.

FOXBusiness.com's Week in Review: May 25-29, 2009

Monday

The markets were closed Monday in observance of Memorial Day.

Tuesday

Another busy week of auto maker news kicked off Tuesday. Union officials from the United Auto Workers representing workers at GM (GM) met in Detroit to begin approving deal to cut labor costs. This contract would change the terms of payment owed to a UAW trust fund. This is one of the things that stand in the way of GM reaching its June 1 deadline to restructure.

Two reports were released Tuesday morning, one on home prices and the other on consumer confidence. Home prices, according to the Standard & Poor’s/Case-Shiller Home Price Indices, fell 18.7% in March, compared to a year earlier. But consumer confidence made a surprise jump thanks to a brighter outlook on employment. The index blew past economists’ expectations of 43, hitting 54.9 in May. This is up from 40.8 in April.

President Obama nominated federal appeals court Judge Sonia Sotomayor to the Supreme Court Tuesday. If approved by the Senate, she will be the first female Hispanic Justice on the High Court. Some critics worry, however, that she will be anti-business, citing her record on some high-profile cases.

And ending a four-day losing streak, the Dow jumped 200 points on that consumer confidence report, hitting the highest level since last September. The average closed at 8173.

Obama's Supreme Court Nominee

Cavuto: Sotomayor a Game Changer

Ron Paul Scared of Government

Cavuto’s Capper: Life’s Getting out of Hand
Wednesday
Nationwide Average
$2.47 a gallon

The Wall Street Journal’s All Things Digital Conference, D7, was under way in California Wednesday, featuring interviews with some of the biggest names in technology, software, and the Internet. Hosted by Walt Mossberg and Kara Swisher of the Journal, some of the speakers on Wednesday included Twitter founders Biz Stone and Evan Williams and Yahoo (YHOO) CEO Carol Bartz.

But the focus on Wednesday remained on the auto makers. Chrysler CEO Bob Nardelli sent an email out to his employees saying the company is very close to forming its alliance with Fiat. He told them the auto maker was at its last step in this process.

Chrysler’s very sale to Fiat cleared some legal hurdles as well. A bankruptcy judge overseeing the company’s restructuring denied creditors a motion that would have delayed the sale. Three pension funds in Indiana that hold Chrysler bonds said their rights were violated when the Obama Administration offered better restructuring terms to the UAW union. And 300 Chrysler dealerships also attempted to put of the sale. They felt they were given an unfair deal.

Meanwhile, GM moved closer to bankruptcy as its bondholders rejected its offer of a 10% stake in the company if they waived their claims for the $27 billion they’re owed. The bondholders felt this was too small an amount compared to the amount that GM owes them.

Government May Own Up to 70% of New GM

Survey: Recession to End By 4Q of ‘09

Cavuto’s Deal: I Told You So

Cavuto’s Capper: Sales Taxes
Thursday

The All Things Digital conference continued on its last day Thursday, with big speakers including CEO Steve Ballmer from Microsoft (MSFT) and Palm’s (PALM) executive chairman, Jon Rubinstein. Ballmer introduced the company’s new re-branded search engine, Bing, while Rubinstein demonstrated the upcoming Palm Pre handheld.

Spin-off Department: Time Warner (TWX) released plans to spin AOL off into an independent company. AOL has been one of its weakest divisions and Time Warner wants to focus more on its core businesses, including Warner Bros., Time, and Turner Broadcasting Systems.

Meanwhile, Washington was considering creating a new regulator position that would oversee banking. A staff memo on said the Obama Administration is going to propose an idea that the Federal Reserve have a risk regulator.

General Motors offered bondholders a new offer, after the previous one was rejected. The new offer would give creditors a bigger stake in the new company that forms after restructuring.

Murdoch: Auto Unions Getting a Free Pass

Murdoch on the Future of Newspapers

Cavuto’s Deal: A Deal They Can’t Refuse

Cavuto’s Capper: Mortgage Heaven
Friday

This was a big week of news for GM and Friday was no exception. The auto maker, FOX Business confirmed, will be filing for bankruptcy on Monday. This will come after President Obama outlines how his Administration will be overseeing GM’s restructuring.

Meanwhile, UAW President Ron Gettelfinger said the members of the union have approved the GM contract. 74% of UAW members ratified the agreement, which will affect 54,000 workers. The support of the union is expected to make it easier for the auto maker to restructure during bankruptcy.

And ending May on a positive note, the Dow jumped 97 points, closing at 8500 Friday afternoon. This was the best three-month rally in more than 10 years, though the average has a long way to go before reaching its record high again.

All That Glitters Is Gold

GM to File for Bankruptcy

Fed Works to Keep Rates Down

Arctic May Hold More Undiscovered Oil

  

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Cavuto: A Lousy Deal They Can't Refuse?

Missed Thursday's Cavuto ? Catch "The Deal" right here on FOXBusiness.com

I still don't know if General Motors (GM) is shot.

But I do know who'll be calling the shots.

Definitely not GM.

Uncle Sam.

Here's the deal.

Sometimes a lousy deal beats no deal.

And for long-vilified GM bondholders, they're taking this deal because they can also take a hint.

They'd be the whipping boy if this turkey went down, so serve the turkey up.

Albeit a turkey apparently with more meat, a deal that slightly increases their ownership serving from 10% to, if these creditors play their cards right, 15%.

The deal is still pretty lousy for them.

But so is being fingered by the most powerful man on the earth for bringing down the most storied company on earth.

So they're going along, but I suspect with a wrench to their skulls.

But focus not on their skulls. But the numbskulls calling the shots.

Because pay no heed to their stake, focus on the government's stake.

Likely more than 72% in this new GM version of the old GM version.

That's a big stake.

And one not easily unwound.

If even the government were so inclined.

And right now, it doesn't look so inclined.

...so immersed in dictating what kind of cars GM should sell, what dealers should sell 'em, and even what executives should be calling the shots on who sells 'em...That something tells me they ain't going anywhere anytime soon.

Saturday we'll know for sure.

That's the deadline to accept or reject this.

But who at this point would reject this?

The government has just offered 'em a deal too good to refuse?

Who turns down such things?

Cavuto: Taxes Galore

Missed Wednesday's Cavuto ? Catch "The Deal" right here on FOXBusiness.com

I hate to say I told you so...

But now, it is so.

Here's the deal.

I told you hiking taxes on the rich wouldn't cover this spending...That they'd have to dig lower, and shovel wider.

Today, they just did.

...pushing something long considered the third rail of tax proposals.

A national sales tax.

Democratic Senator Kent Conrad suggesting it.

Not a single prominent Democrat rejecting it.

A modern-day value-added tax that would cover everything from the eggs you buy to the egg-heads you seek out.

Let me explain.

Let's say you're feeling sick after leaving a store and paying all these taxes.

You go to see a doctor. But you're taxed on the visit.

Which drives you nuts. So you see a psychiatrist. But you're taxed for the therapy.

Which drives you to drink, but more taxes on what you drink.

Which drives you to suicide, which just drives your family nuts, because they're paying more taxes on everything from your casket to your plot to, if you're lucky, the flowers at your funeral.

Get the picture?

Not a pretty one. But for a Washington facing massive deficits and trillions more in spending for everything from expanded health coverage to whatever the bailout du jour is, you have to get that money from somewhere...

So...Why not everywhere ?

And if this value-added tax has no value, then why not a condemnation from any prominent Democrat anywhere ?

The best the White House can say is it's not in the mix right now. Refusing to rule out it might very well be “not too long from now.”

So now...who warned you about this.

I told you change was coming.

And you'd be paying a lot more than loose change for the privilege.

GM Bondholder Talks Could Extend Beyond Deadline

Talks aimed at keeping General Motors (GM) out of bankruptcy could go right down to the wire, as the government tries to get bondholders to go along with a plan that would allow the auto maker to survive.

A person familiar with the GM negotiations says that talks with bondholders on the Treasury Department’s proposal to exchange 90% of unsecured GM debt for equity in the auto maker could continue until the Obama Administration’s June 1 deadline for a restructuring deal, despite Tuesday’s midnight deadline for the exchange offer.

“We’ve said consistently we’d be happy to talk to any stakeholder anytime about anything,” the person said.

The person said that there have been “more constructive” conversations with bondholders recently, with bondholders negotiating more as a group rather than individually, which has helped the process. The source said the government had made a “full and fair” proposal to bondholders and that it remains “in a dialogue with them.”

He added that bondholders “would get nothing” or an “unbelievably small” amount if the company went into bankruptcy.

He said that with the requirement of 90% bondholder approval for the debt-to-equity exchange -- a high hurdle from the beginning -- chances of a bankruptcy filing for GM remain “greater now.”

It is “not the preferred option, but it is definitely an option,” he said. “We’re continuing to work on all fronts.”

“We’d like to have ‘peace in the valley,’” he said of trying to reach agreement with the bondholders by May 31.

Check out our GM page for the latest videos and stories on the struggling auto maker.

The person said bankruptcy would be more complicated for GM than it was for Chrysler, because GM is a public company, with publicly traded debt and equity; it is a larger company; and it is a global company.

“We do expect it to be a more complicated [bankruptcy] process, a longer process,” he said.

Regardless of the outcome of negotiations with bondholders, the Treasury would likely end up owning a large stake in GM, the person suggested.

The Administration is looking at providing another $30 billion to GM, though it’s unclear if this is bankruptcy financing/post-bankruptcy capital, converted debt to equity. The additional $30 billion is about what GM called for in its reorganization plan.

Combined with the $20 billion already loaned, this would take the Treasury commitment to $50 billion.

The Canadian government will participate in the GM restructuring, as it did with Chrysler. The Washington Post reported that Canada will kick in about $9 billion. With the Canadian money, the bailout would be pushing $60 billion.

Obviously, with this much skin in the game, an ownership level of around 70% by one or both governments cannot be ruled out, but the final percentage will depend on any final deal with bondholders.

Additional debt would not help GM become a viable company long term, the person suggested.

“What does that leave? That leaves equity,” the person said.

Geithner Reveals Recipients of New Markets Tax Credits

In a speech on Wednesday, Treasury Secretary Timothy Geithner announced that 32 organizations across the country will be awarded $1.5 billion in tax credits as part of the Administration’s efforts to revitalize the nation’s hardest-hit communities.

The New Markets Tax Credit program, which has been in place since December 2000 but received a funding boost from the American Recovery and Reinvestment Act passed in February, allows taxpayers to receive a credit for making qualified investments in projects aimed at low-income communities.

“Many communities have been left with a shortfall of financial support and are unable to pursue desperately needed projects, leaving residents to fall even further behind,” Geithner said in a statement released prior to his speech. “The New Markets Tax Credit program helps break that cycle by providing an incentive to invest in communities to break ground on new projects, create jobs, and offer much needed services.”

The program focuses on bringing capital to a wide spectrum of projects, including those that focus on the development of real estate, medical and educational facilities and alternative energy, Geithner said in his speech. The credit offered to the investor is equal to 39% of the cost of the investment and is claimed over a period of seven years, according to the Treasury.

Topping the list of the 32 organizations receiving tax rewards is ESIC New Markets Partners LP, a real-estate investment and lending firm in Columbia, Md., with $95 million in tax credits. Close behind are the Capital One Community Renewal Fund in McLean, Va., and NCB Capital Impact in Arlington, Va., each with $90 million in tax credits.

Giving private companies incentives “offsets some of the risks” the companies take by investing in these projects, Geithner said. The chosen organizations provide services to a combined 33 states, the District of Columbia and Puerto Rico.

Geithner’s announcement was made at Project Hope -- a former beneficiary of the tax-credit program -- in the Roxbury section of Boston.

In a briefing following the afternoon speech, Treasury officials explained that the latest batch of recipients were actually leftover applicants from the 2008 applicant pool. The program received 239 applications requesting close to $22 billion during the 2008 round, but only $3.5 billion could be awarded at the time. The 70 chosen recipients -- each of whom were graded on their business strategy, community impact, management capacity and capitalization strategy -- were announced in October, the officials explained.

The Recovery and Reinvestment Act enacted in February, however, allocated another $3 billion to the New Markets Tax Credit Program to cover the 2008 and 2009 years. The additional funding allowed Treasury officials to revisit the existing applicant pool and extend $1.5 billion in tax credits to organizations that weren’t initially chosen.

Treasury Selloff Paralyzes Markets; Dow Falls 173

A selloff in the Treasury markets stole the show on Wednesday as the Dow plunged nearly 175 points -- undoing virtually all of Tuesday's confidence-inspired rally -- on fears that higher interest rates will hinder an economic recovery.

Today’s Markets

The Dow Jones Industrial Average lost 173.47 points, or 2.05%, to 8300.02, the S&P 500 sank 17.27 points, or 1.90%, to 893.06 and the Nasdaq Composite fell 19.35 points, or 1.11%, to 1731.08. The consumer-friendly FOX 50 slumped 12.49 points, or 1.87%, to 655.94.

Reversing their normal relationship, Wall Street took its cues from the bond market as stocks took a turn for the worst after the 10-year note jumped to its highest level since mid-November despite a successful five-year note sale.

“The Treasury market is trading in kind of a panic mode,” said Nick Kalivas, vice president of financial research at MF Global. “It’s just making people nervous that the economy is not going to do well if rates continue to shoot up.”

The selloff on Wall Street erased most of the Dow's 200-point surge from Tuesday, which had been based on hopes an unexpected jump in consumer confidence would carry the U.S. to a second-half recovery.

“I’m kind of not surprised where we are right now but I’m surprised why we got there,” said Jonathan Corpina, senior managing partner at Meridian Equity Partners. “Investors are just trying to figure out what’s the biggest focus of the day. Clearly it’s lying in the Treasuries today.”

The Dow was led lower on Wednesday by Proctor & Gamble (PG) and General Motors (GM), which came a day closer to a seemingly-inevitable bankruptcy filing. Just a handful of blue-chip stocks closed in the green, including Merck (MRK) and Caterpillar (CAT). The Dow has fallen in five of the last six days.

The Nasdaq Composite didn’t fall as hard as its counterparts as tech stocks rallied around SanDisk (SNDK), which unveiled a patent deal with Samsung

The Dow fell more than 100 points as the selloff in the bond market picked up steam. The 10-year note soared to a fresh high of 3.6% on fears of oversupply even after the U.S. successfully sold $35 billion of five-year notes Wednesday.

“It’s basically showing that the Fed’s buying of Treasuries is not really stabilizing conditions in a serious way,” said Kalivas.

Bond traders remain skittish about the government's ability to fund government rescues that have helped lead to an expected $1.75 trillion budget deficit. That ability will be tested again on Thursday in a $26 billion seven-year note sale.

The markets failed to avoid a selloff despite a number of positive developments.

On the economic front, the National Association of Realtors said existing home sales ticked up 2.9% in April to an annual rate of 4.68 million units. The report was slightly better than economists had predicted but did not blow Wall Street's expectations out of the water like Wednesday's confidence report.

Also, the markets received a flurry of positive earnings reports from retailers such as American Eagle Outfitters (AEO), Staples (SPLS), Borders (BGP) and Dollar Tree (DLTR). On the other hand, agricultural company Monsanto (MON) warned it will miss the Street's estimates in the third quarter, American Eagle issued cautious guidance and Zale (ZLC) plunged on its quarterly loss.

Meanwhile, the specter of a GM bankruptcy, which would be the largest industrial failure in U.S. history, continues to loom over Wall Street.

GM's shares tumbled after the auto maker said its bond exchange offer to exchange 90% of $27 billion in unsecured debt failed to reach its goal. With a government-imposed June 1 deadline quickly approaching, GM said its board will meet to review its options.

Crude oil didn't help the bulls' case on Wednesday as the commodityclimbed for the third-straight day, ending at fresh 2009 highs a day before a key OPEC meeting. Crude closed up $1 per barrel, or 1.60%, to $63.45.While the 86% surge from February lows is a positive omen for the global economy's prospects, it represents a headwind for cash-strapped consumers.

Corporate Movers

Chrysler LLC scored another legal victory as a bankruptcy court judge denied a motion that could have delayed the sale of the auto maker's assets to an entity led by Italian auto maker Fiat. Chrysler is widely expected to receive a green light for the sale in the coming days.

Bank of America (BAC) said it has raised $26 billion in capital so far and is "well on its way" to reaching the government's mandate to plug a $33.9 billion shortfall. BofA said it hopes to use the cash to "reduce reliance on government support for the company."

Zale (ZLC) lost one-fifth of its market value after the jeweler an adjusted-loss of 73 cents per share, missing estimates by nearly 40 cents. Zale suffered a 20.5% plunge in quarterly sales amid the recession.

Monsanto (MON) projected a third-quarter profit of $1.15 per share, well shy of analysts' expectations for $1.58 per share. The company said it remains on track to meet the lower end of its full-year guidance.

American Eagle Outfitters (AEO) beat the Street with a first-quarter profit of 11 cents per share despite a steeper-than-expected 4% decline in revenue. The retailer sees second-quarter earnings of 12 cents to 15 cents per share, compared to the Street's view of 14 cents.

Dollar Tree (DLTR) posted a stronger-than-expected quarterly profit of 66 cents per share as the discount retailer's same-store sales jumped 9.2%. The company boosted its 2009 guidance within Wall Street's expectations and projected an earnings beat for the second quarter.

Staples (SPLS) topped expectations with an adjusted-profit of 22 cents per share, which was off by 33% from a year ago. The office supplies retailer reaffirmed its synergy expectations related to its takeover of Corporate Express.

Borders (BGP) reported a narrower-than-expected adjusted-loss of 27 cents per share as the bookseller's cost-cutting efforts offset an 11.6% tumble in revenue.

Global Markets

European markets closed in the green as London's FTSE 100 rose 0.1% to 4416.23, Germany's DAX jumped 0.3% to 5000.77 and France's CAC 40 rallied 0.76% to 3294.86.

In Asia, Japan's Nikkei 225 added 1.37% to 9438.77 and Hong Kong's Hang Seng surged 5.26 % to 17885.27.

Oil Holds at 2009 Highs Above $62 as OPEC Meets

Crude oil prices for July delivery were on pace Wednesday to close higher for the third straight day and at a fresh 2009 high after Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries oil cartel, said the global economy is strong enough for rising prices.

In late morning trading, crude was up 14 cents per barrel to $62.59. Crude is up 84% after hitting its closing low of $33.98 in February 2009, and Tuesday hit the highest settle since Nov. 5.

“Ali Naimi, Saudi Arabia’s oil minister, expects to see prices go up, which raises concerns and makes us think there could be a drop in exploration and production,” said Phil Flynn, vice president and senior market/energy analyst of Alaron Trading.

OPEC plans to meet for a closed session on Thursday to set output policy and possibly make cutbacks in production, which could lower supply and send prices higher.

Check out our Oil Companies page for the latest news and videos on oil.

“Obviously, OPEC is making it clear we shouldn’t expect much change and regardless of OPEC, we should expect to see high prices,” said Flynn. “OPEC is proving they have their own best interests at heart.”

Meanwhile, for the third straight day and six of the last seven sessions, heating oil is up, rising 0.0072 cents per gallon to $1.5525. RBOB gasoline is also up for the third straight day, gaining 0.0229 cents per gallon to $1.8753.

Also, gold futures fell 50 cents per troy ounce to $954.60.

FOXBusiness.com's Week in Review: May 18-22, 2009

Monday

The week kicked off with optimistic guidance from home improvement store Lowe’s (LOW), though it missed expectations for the quarter.

A report was released that said applying the government’s stress tests to small and medium-sized business showed that they needed to raise $24 billion to be able to handle worsening economic conditions. The research, done at Sandler O’Neill, found capital shortfalls in 38% of the 200 banks that are just smaller than the largest 19 in the U.S. It also found that as many as 500 banks could end up closing.

Geithner was in the news quite a bit this week, beginning on Monday when he said that he sees some signs of economic improvement, but expects more unemployment still to come.

And the bulls came back to town as positive retail and bank news renewed economic hopes and sent the Dow up 235 points. This was the biggest rally in over a month. The Average closed at 8504.

California to Vote on Budget Measures
GM, UAW Negotiate Factory Closings

The Geithner Giveaway

Study: Small Banks Need Capital

Nationwide Average
$2.39 a gallonTuesday

Several of the nations biggest 19 banks have asked the government if they can begin repaying money they borrowed through the TARP program. These include JPMorgan Chase (JPM), Goldman Sachs (GS), and Morgan Stanley (MS). The government is expected to approve a group of the biggest banks to repay the money at once, rather than approving individual applications.

Meanwhile, President Obama announced sped-up fuel economy standards for cars sold in the U.S. Efficiency will need to be upped by 5% a year beginning in model year 2012, eventually reaching 35.5 miles per gallon in 2016. The 2009 requirement, for perspective, is 25 miles per gallon. These changes are supposed to help remove 900 million metric tons of carbon dioxide from the air. Though, challengers to the standards say it’s unfair for the government to tell car makers and buyers how their cars are designed.

JPM, GS and MS Pushing to Repay TARP

FBN Takes Fed to Court Over TARP Details

Cavuto's Deal: Autos All In

Cavuto's Capper: Loose Lips Sink Ships
Wednesday

Congress approved new rules for credit cards Wednesday. Sweeping new limits were passed in the House and are expected to be signed into law by President Obama. This bill will restrict credit card issuers from being able to increase interest rates on existing balances and charge fees, among other things.
Oil hit a six-month high, climbing above $62 a barrel after a steep drop in inventories ahead of summer was reported by the Energy Information Administration.

Later, bankrupt auto maker Chrysler announced that Robert Nardelli would be stepping down as chairman of the company and replaced by Robert Kidder once the merger of Fiat is finished. Kidder is currently the lead director for Morgan Stanley, Schering-Plough, and Microvi Biotech.

CA Treasurer: Not Asking for Bailout

Ford Dealership Hiring Despite Sale Slump

Cavuto's Deal: Governator Plan Terminated?

Intel Chairman on Stepping Down
Thursday

Another big guy stepping down was announced Thursday. Chairman and CEO of AIG (AIG) Ed Liddy said he will step down from both those roles once replacements for them are found. He recommended that these roles be separated, which the board agreed to.

Meanwhile, General Motors (GM) and the United Auto Workers reached a deal on the auto maker’s restructuring. An agreement was made to cut labor costs and change the terms of retiree health-care debt. This would need to be ratified by the 54,000 UAW-represented factory workers. This is one of the key steps needed to be taken in order to meet the company’s government-imposed restructuring deadline of June 1.

Standard & Poors, a credit ratings agency, cut Britain’s (yes, the country) outlook to negative for the first time. The agency said debt could near 100% of the nation’s GDP. Fears of similar rating cuts for the U.S. have been on the minds of investors here as well.

Florida’s BankUnited was shut down in what is the biggest bank failure so far this year. The bank will be bought by a group of private equity firms.

UAW Reaches Tentative Deal With GM, U.S.

GMAC Bailout Aids Alternative Energy?

Cavuto's Deal: Obama vs. Cheney

Cavuto's Capper: Not Easy Being Cheney
Friday

GM reached a tentative deal with its Canadian union, a day after it worked out concessions from the UAW. These agreements, which will help cut costs, will help steer the company into bankruptcy should the Obama Administration’s attempt to win over GM bondholders fail.

Meanwhile, the Treasury said it will invest an additional $7.5 billion into auto finance company GMAC and convert a loan it made to GM into a stake of one-third in GMAC. This now brings the taxpayer investment in the lender to $12.5 billion.

And analysts at Morgan Stanley said most U.S. banks will repay their TARP money by the fourth quarter. They also said banks will probably make more stock offerings up until that point.

Last-Minute Travel Deals

Tova Borgnine Details Path to QVC Stardom

Mom and Pop’s Kids

Top Economic Adviser on Credit Card Rules

  

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Week Ahead: All About Consumers, Retailers

Following a week when the markets closed up with slight gains, the upcoming holiday-shortened week is jammed packed with earnings, key economic data and auto news.

Markets are closed Monday in observance of Memorial Day, pushing Treasury’s sale of three- and six-month bills to Tuesday.

The bankruptcy clock is ticking louder for General Motors (GM) as the government-imposed June 1 deadline sits just around the corner. The cash-strapped auto maker continues its efforts to avoid filing for bankruptcy or to arrange for a speedy filing that lasts as few as 30 days.

Housing and consumer sentiment data will dominate next week’s economic data lineup. The markets will receive home price information from the Case/Shiller Index, as well as existing home sales numbers on Wednesday and new home sales on Thursday. Analysts are expecting existing-home sales to tick up 1.8% in April and new home sales to increase 2%.

Data regarding the pulse on Main Street comes out Tuesday with the Consumer Confidence report and University of Michigan’s consumer sentiment report for May on Friday.

The markets will also have to grapple with gross-domestic-product numbers before Friday’s bell -- which are expected to show a 5.5% contraction in the first quarter.

Wednesday will be a big day for the retail sector as traders grapple with the release of the Redbook Retail Sales Index for May before the bell as well as a slew of earnings from retailers including American Eagle (AEO), Chicos (CHS), Coldwater Creek (CWTR) and Dollar Tree Stores (DLTR). AutoZone also reports earnings.

The markets will get an idea on just how tightly consumers are holding onto their purse strings on Thursday, with earnings reports due out from Big Lots (BIG) and Costco Wholesale (COST).

The Organization of Petroleum Exporting Countries [OPEC] meets Thursday-- and despite oil’s recent rise above $60 a barrel, analysts are not expecting the cartel to make fresh production cuts.

Market Winners & Losers: Sears, General Motors

The last day of the week ended on a down note ahead of the three-day weekend. The Dow fell 0.18%, the S&P lost 0.15% and the Nasdaq lost 0.19%.

Here are Friday’s winners and losers:

Winners

Sears Holdings Corp. (SHLD)
Sears rocked the retail world with better-than-expected earnings, and investors cheered. The stock gained 10.4%, or $5.21, to close the week at $55.40.

Autodesk Inc. (ADSK)
The company’s better-than-expected profit and a series of analyst upgrades helped the stock jump 9.9% on Friday. ADSK shares gained $1.87 to close at $20.70.

Archer Daniels Midland Co. (ADM)
An upgrade by Citi helped shares of the agriculture-based company gain 5.1% on Friday. ADM shares ended the week at $27.17, a gain of $1.32 on the day.

Avon Products Inc. (AVP)
Analysts at Stifel Nicolaus gave Avon’s stock a ‘buy’ rating on Friday, sending shares up $1.16, or 4.7%, to settle at $25.80.

CME Group Inc. (CME)
CME shares jumped $13.17, or 4.7%, to close at $293.26 on Friday as gold and oil made gains.

Losers

General Motors Corp. (GM)
Despite concessions from the UAW, GM shares lost 25.5% Friday as its restructuring deadline looms. GM declined 49 cents to $1.43.

SLM Corp. (SLM)
The student lender gave up Thursday’s gains to settle at $5.77, a loss of 74 cents, or 11.4%.

Salesforce.com Inc. (CRM)
Concerns about the company’s revenue growth cost the stock 8.8% on Friday. CRM shares fell $3.50 to $36.15.

SunTrust Banks Inc. (STI)
Morgan Stanley dropped the downgrade bomb on the regional bank, which saw its shares sink 6% on Friday. STI closed the session at $13.71, a loss of 87 cents.

American International Group Inc. (AIG)
News of CEO Ed Liddy’s departure shook the stock as shares fell 5.6%. The stock closed the week down 10 cents at $1.70 a share.

Cavuto: Wilbur Ross is On to Something

Missed Friday's Cavuto ? Catch "The Deal" right here on FOXBusiness.com

I have seen the future of our financial salvation.

And it isn't an Uncle named Sam.

It could all hang on a guy named Wilbur.

Happy Friday.

And be very happy every day there are guys like Wilbur Ross around.

You see, Wilbur’s rich.

And Wilbur got rich buying things no one else wanted, and seizing opportunities no one else saw.

So when Wilbur buys "now," folks notice now...Want to know "what" Wilbur’s buying now.

Like when he buys into, of all things, a federally-seized Florida bank.

That bank?

BankUnited.

As stressed a test case as there ever was...But for Wilbur and company, as good an opportunity as there ever could be.

Seems like boring bank stuff to some.

Not to me.

Here's why.

If you want to break the government takeover binge, you need private guys to take up the slack.

If they're diving in, maybe the water's nicer than we thought.

And that has a ripple effect.

That's not to say Wilbur’s some stone in a pond, or just "stoned," period, for swimming in this pond.

But after a week we saw California go bust, and the federal government all but prove it ain't that far behind...

Maybe it's guys like Wilbur who will save "all" our behinds.

...that maybe Wilbur is the sober, reassuring face of our post government-buying-binge-hangover.

I could drink to that.

Al Lewis: Mozilo's Hype-Job Caught On Camera

There's no better reason to maintain perpetually bronzed skin and blinding white teeth than to be interviewed on CNBC.

Angelo R. Mozilo, who helped spark the global economic collapse with his imploding Countrywide Financial Corp., liked to use the word "terrific" in TV interviews. But I'm guessing he won't sound so terrific if they are ever replayed in court.

By September 2005, even then-Federal Reserve Chairman Alan Greenspan was getting concerned about risky mortgage lending. But not Mr. I-spent-55-years-in-the-mortgage-business.

"I don't know why the Chairman's, you know, .. he's obsessed with this issue," Mozilo told CNBC that month.
"I don't see anything wrong, frankly, with people .. remodeling their home .. or financing a new business venture. .. I think it's terrific for the economy. It's terrific for the American people. And we have seen, particularly in the home equity loan area, very, very low delinquencies and virtually no foreclosures. I just think it's a terrific vehicle for the consumers of the country and has driven our economy."

States attorneys general now accuse Mozilo of predatory lending practices. And investors are suing him, alleging the ol' pump and dump.

Mr. Terrific personally made more than $400 million cashing stock options over the years as he touted such exotic instruments as "pay-option adjustable-rate mortgages" to consumers. He also managed to unload his beleaguered company on Bank of America Corp. (BAC) for $4 billion as the whole thing slid like a mansion in a mudslide.

The Securities and Exchange Commission has indicated it may file charges against Mozilo. The Federal Bureau of Investigation is still investigating. And New York's senior Democratic senator, Chuck Schumer, has said he wants to see Mozilo "boiled in oil," as if all those years of baking weren't hard enough on the guy's skin.

Mozilo's attorney, David Siegel, has called the claims politically motivated and vowed that the facts will clear his client. For now, though, it's probably a good idea to keep the guy off TV.

"Over the entire history of this country, housing prices have never gone down nationally," Mozilo told CNBC in May 2005. "Over the longer term, there's no better investment that I've observed than owning a home."

What about defaults?

"They're pretty low," he said. "And I think one of the reasons being is because you've had such an escalation in real-estate prices that if anybody gets into trouble, they have a way out; you know, they can sell the home. .. As long as we continue the job formations that we have, the momentum that we have, you're going to have very little incident of default. "

And what if housing values actually do go down?

"If you're in a home and you're going to live in that home, whether the value of the house goes up or down, except for your psyche, nothing really happens."

In September 2006, Mozilo told the Los Angeles Times that he personally called customers with pay-option ARMs to see if they understood them.

"What we're finding out is that they're pretty smart," he reported. "It's like voters: Individually they're sort of idiots, but collectively they seem to make the right decisions. .. The average age of our borrower is about 38 years old. They have never in their adult lives seen values going down. The concept is alien to them."

In a November 2006 article by trade publication Origination News , Mozilo talked about getting into reverse mortgage business to help older Americans cash out.

"There is no longer a euphoria involved in paying off your mortgage," he said. "The equity buildup that boomers are experiencing .. they will need that money to support their lifestyle."

Yet by then, even Mozilo had to acknowledge housing price declines, which is why he began begging the Federal Reserve Bank to lower interest rates.

"People can no longer tap their equity in order to continue to consume, and so that should have a negative economic effect," he complained in a November 2006 CNBC interview.

"I don't think it's .. going to be earth-shattering. But I think it is .. a factor. .. We'd like to see interest rates go lower. .. I think the Fed can help this along substantially and reduce the amount of pain by reducing the Fed Funds."

In a December 2006 interview with American Banker , Mozilo mused whether his career would be tainted because of Countrywide's pay-option adjustable-rate mortgages. "Only history will tell," he said.

"I never totally feel comfortable," he told the trade publication. "I wake up scared every day. I think it's an essential ingredient to being successful."

In March 2007, Mozilo came on CNBC to talk about a looming subprime mortgage crisis.

"This is now becoming a liquidity crisis, an unnecessary one," he said. "There's been a rush to judgment, an overreaction, a baby out with the bath water."

But not to worry about his baby.

"This will be great for Countrywide," he said, "because all the irrational competitors will be gone."

In December 2007, Mozilo went on CNBC to say that he was not in talks with Bank of America for yet another life-saving cash infusion.

"Countrywide," he declared, "is a strong, viable financial company."

Good thing he never listened to himself when his stock options vested.

(Al's Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective. The column is published each Tuesday and Thursday at 9 a.m. ET. Contact Al at al.lewis@dowjones.com or tellittoal.com)

Consumer Groups Push for Expanded Rights to Sue Financial Firms

Consumer groups are lobbying the Obama Administration to expand the ability of consumers to file lawsuits against financial companies that sell them mortgages, credit cards, home equity loans and other financial products that fail to meet minimum government sales, marketing and disclosure standards.

“We need to get away from…gimmicks, tricks and traps,” said Lauren Saunders, managing attorney at the National Consumer Law Center in Washington, D.C. “We ought to have some common sense rules and we ought to have consequences for people who violate them.”

But banks warn the proposals could limit lending and raise borrowing costs, especially if they lead to a new wave of class action lawsuits.

“You may have a customer here and there that's able to win a lawsuit,” said Wayne Abernathy, executive vice president at the American Bankers Association. “But overall what you're going to do is raise the cost of everything as [banks] take defensive measures to protect against the potential lawsuit. There are more papers to fill out. The standards to get a loan become raised significantly. It becomes harder to get a loan, the costs go up, the quality of services will decline.”

Giving individuals the right to file civil suits against a company that sells a “faulty” consumer financial product is an existing legal option in some circumstances, such as when a company lies about terms and conditions.

But if adopted by Congress, the new consumer proposals would expand customer opportunities to file lawsuits, supplementing existing government enforcement options. In particular, consumer advocates are targeting products and practices they consider “predatory.”

“It’s really about changing the behavior on the front end,” when such products are being created, marketed and sold, said Gail Hillebrand, financial services campaign manager for Consumers Union.

Cora Ganzglass, legislative director of the National Association of Consumer Advocates, added, “A threat of a lawsuit creates a self-policing of industry.”

Consumer groups want the Obama Administration to include expanded legal remedies in its forthcoming plan to reform regulation of financial markets. As part of the plan, the administration is considering creating a new agency to regulate financial products, a “Financial Product Safety Commission,” similar to the existing Consumer Product Safety Commission, which regulates the safety of toys, appliances and other products.

People familiar with the proposals said new legal remedies for “faulty” financial products could be included in the authority to create a financial products commission or could be given to existing regulators, such as the Federal Reserve, the Securities and Exchange Commission and the Federal Trade Commission.

Because of the current public and political backlash against financial companies in the economic crisis, advocates are already winning some new consumer protections in financial products.

For example, the credit card reform bill signed into law by President Obama on Friday requires a lender, for the first time, to consider a customer’s ability to pay when issuing a card or increasing credit limits.

Also, a new House mortgage reform bill would create a new “net tangible benefit” standard for lenders refinancing a loan. It says that they may not extend credit “in connection with any refinancing of a residential mortgage loan unless the creditor reasonably and in good faith determines that the refinanced loan will provide a net tangible benefit to the consumer.” The measure would order bank regulators to come up with a definition of “net tangible benefit.” It also includes an “ability to pay” provision.

Finally, in a new proposal to regulate derivatives markets -- for options, futures, credit default swaps and other financial instruments that derive their value from some underlying asset or security -- the White House has called for applying so-called “suitability” requirements in derivatives sales.

The suitability rule is long-standing in securities markets. It requires Wall Street firms to confirm that an investment is “suitable” for an investor -- that at a minimum, it is not so complex that an investor can't understand how it works, but if he ends up buying anyway, suffers financial hardship as a result. The rule generally limits sales of more complicated investments to more sophisticated investors, such as insurance companies, pension funds and wealthier people who can pay lawyers, analysts and advisors to review them.

“Current law seeks to protect unsophisticated parties from entering into inappropriate derivatives transactions by limiting the types of counterparties that could participate in those markets,” the Treasury Department said in releasing the new derivatives plan. “But the limits are not sufficiently stringent.”

Consumer advocates and financial industry sources said that such rules -- or versions of them -- likely will end up in the Administration’s broader proposal for reforming financial regulation. Such provisions generally would not allow a consumer to sue a firm over a mortgage or other product if he suffered financial harm because of his own personal circumstances, such as losing his house to foreclosure after being laid off from a job and becoming unable to make monthly payments, or because of bad practices by a consumer, such lying about income or assets.

Rather, such proposals would mandate new minimum standards for disclosure, terms, customer profiles and other aspects of structuring, marketing and selling consumer financial products. If regulators determined a company violated them and a customer suffered financial harm as a result, the customer would have the right to sue.

If a consumer financial product “is not harmful, it’s not going to set [a customer] up to fail,” said Saunders of the National Consumer Law Center.

In theory, a customer could file suit even without any government investigation and ruling, if the customer suspected a company violated the rules. More likely, sources said, plaintiffs’ lawyers would file class action suits on behalf of a group of costumers, the more common procedure.

“I think in the end you have to recognize if you open up that new avenue, you've opened up new opportunities for the trial lawyers and a whole new world of deep pockets,” said the ABA’s Abernathy.

A spokesman for the American Association for Justice, a Washington trade group for trial lawyers, declined to comment on the consumer proposals, saying they had not yet been formally proposed by the Administration -- and as a result the group had not yet had an opportunity to study them.

The White House plans to send Congress its regulatory reform package in June. The plan is also expected to include proposals to give the Federal Reserve additional powers to regulate big, integrated financial firms that are “systemically important” to the global financial system, as well as proposals for taking over and closing such firms outside of the bankruptcy process if they fail.

“We're at the beginning of working through this,” Treasury Secretary Timothy Geithner told a House subcommittee on Thursday. “But the objective is, which is the most important thing, is that we have better designed rules to protect consumers that are in force much more effectively and evenly across the entire financial system.”

30-Year Mortgage Rates Hold Steady on Fed Moves, Survey Finds

Long-term mortgage rates held steady for the week ended May 21 as moves by the government to keep rates low continue to take effect, according to Freddie Mac’s (FRE) latest survey.

The 30-year fixed-rate mortgage averaged 4.82%, a hair under last week’s average of 4.86%. While the rate is higher than the historic lows seen in April, it’s still well off the 5.98% rate recorded during the same week last year.

Mortgage rates have remained under 5% for the past ten weeks as a result of recent actions by the Federal Reserve and Treasury. In March, the Federal Reserve announced it would buy up more than $1 trillion in securities, and has since purchased $115 billion in Treasury bonds.

“Concerns about the economy are balancing out worries about the large issuance of government debt,” said Greg McBride, senior financial analyst at Bankrate.com. “Mortgage rates are in a bit of a holding pattern as a result.”

The Federal Reserve and Treasury have also picked up billions in mortgage-backed securities, with the Fed buying $740 billion through mid-May and the Treasury buying $136 billion through April, said Frank Nothaft, vice president and chief economist at Freddie Mac.

Freddie Mac’s latest survey comes on the heels of a move by President Obama to prop up the floundering housing market. On Wednesday, the president signed into law a measure that aims to stem foreclosures and prevent lenders from preying upon struggling homeowners.

The new measure, known formally as the Helping Families Save Their Homes Act, builds upon a program already in place that provides lenders with incentives to make loan modifications.

Geithner: Big Spending Was Unavoidable

Treasury Secretary Timothy Geithner defended the Obama Administration’s fiscal policy on Thursday, saying deficit spending was unavoidable until the U.S. economy stabilizes.

In testimony before a Congressional committee, Geithner acknowledged that rapidly escalating national debt could erode the value of the dollar and put the U.S. at risk of losing its AAA credit rating.

There was no choice but to quickly implement costly stimulus programs, however, Geithner said, given the state of the economy when the new administration took over in January.

The only “responsible way” to address the fiscal crisis was for the government to purchase U.S. Treasuries in an effort to stimulate the economy, a policy that would necessarily increase the deficit, he said.

Not everyone was convinced, and Geithner was asked by members of the House Appropriations financial services subcommittee how the administration plans to deal with the deficit once the economy starts to bounce back.

“We will work very hard to make sure that we bring these deficits down once we put in place a recovery and we fix this crisis that we inherited. Remember, we start with, and we started with, an exceptionally high deficit. The cost of the crisis required exceptional costs up front. There is no way we could solve this crisis without the temporary necessity of higher short-term deficits, and if we did not do this, again, we would face higher deficits in the future,” said Geithner.

The Secretary also addressed questions regarding the success of the Troubled Asset Recovery Program, or TARP. In addition, some members voiced concerns that the administration is meddling too much in matters that might better be left solved by market forces.

“While TARP is proving effective at improving the immediate stability of the financial system, the scope of the issues that this administration and this department face extend beyond TARP to include striking the delicate balance between intervention and allowing market participants latitude to operate; devising a new financial regulatory structure for the future; and working through the tough problems of what form our government-sponsored enterprises, Fannie Mae and Freddie Mac, should take as we emerge from this difficult period,” he said.

Questions also arose over what plans the administration has to prevent further erosion of the dollar.

“As the secretary of the Treasury, I want you to know that my basic obligation is to make sure that we put in place policies that sustain confidence in this economy, in our currency, that we sustain a strong dollar, that we retain what is a great strength and asset to this country, which is the most deep and most liquid market for Treasury securities in the world,” he responded.

Late-Day Dive Clips Stocks

A last-minute slide led by the financial sector derailed a triple-digit rally on Wednesday as the markets continue to run into resistance following Monday's surge.

Today's Markets

The Dow Jones Industrial Average lost 52.81 points, or 0.62%, to 8422.04, the S&P 500 fell 4.66 points, or 0.51%, to 903.47 and the Nasdaq Composite sank 6.70 points, or 0.39%, to 1727.84. The consumer-friendly FOX 50 dropped 3.73 points, or 0.56%, to 665.66.

“I think this rally has gotten ahead of itself and we were due for a period of backfilling and moving back toward the economic trends,” said Nick Kalivas, vice president of financial research at MF Global.

The bulls had bid up stocks earlier in the day, cheering a number of positive stories: Bank of America's (BAC) latest successful fundraising efforts, Target's (TGT) better-than-expected quarterly results and a rally in the energy sector as crude oil climbed above $62 per barrel.

Wednesday's late selloff appeared to be unprovoked but was led by the financial sector, which slumped almost 3% even though Treasury Secretary Timothy Geithner said the financial system is starting to heal and the government's toxic asset programs are set to start in weeks.

“This pullback in the market off the morning’s highs is again being led by the three most important groups in my opinion when analyzing the state of the U.S. economy: retail, housing and financials,” Peter Boockvar, equity strategist at Miller Tabak, wrote in a note. Boockvar noted that those sectors also led last week’s declines.

The markets are still sharply higher on the week, though the Dow has now erased roughly 85 points of Monday's 235-point jump. Last week the Dow tumbled 300 points, a rare break from a two-month surge that has been sparked by signs of hope for the economy.

The Dow, which is stuck in its first two-day losing streak since late April, was led lower by Hewlett-Packard (HPQ) and JPMorgan Chase (JPM).On the upside, General Motors (GM) and McDonald's (MCD) ended sharply higher.

The Nasdaq Composite ended with modest losses, its first in three days, as tech giants like Cisco (CSCO) tumbled on HP's lukewarm guidance for the current quarter.

Wall Street may have been spooked by the release of the Federal Reserve's April 29 minutes, which showed the central bank has slashed its economic outlook as it now sees 2009 GDP declining as much as 2% and unemployment reaching up to 9.6%. At the same time, the Fed said it sees "tentative evidence" that the pace of economic decline has slowed and is open to boosting its plan to buy mortgage and Treasury securities.

Banks Reverse Course

Early enthusiasm for new fundraising efforts by BofA and Regions Financial (RF) proved unsustainable as financial stocks were the biggest losers on Wednesday. BofA has now raised $13.47 billion through common-stock sales and is more than halfway to its goal of plugging the gap in its balance sheet.

While Wall Street has cheered banks' ability to tap the private markets for cash instead of the government, an avalanche of common-stock offerings has flooded the markets with excess supply and diluted current shareholders.

“Despite the fact the market seems to want to rally, the secondary issue is so large I think it’s providing some problems. The market is having trouble digesting the supply,” said Kalivas.

Earnings, Energy Overshadowed

The slide in the financial sector eclipsed another positive day of retail news. Following in the footsteps of Lowe's (LOW) and Home Depot (HD) earlier this week, Target (TGT) said its quarterly profit declined 13% to 69 cents per share, widely exceeding expectations. Similarly, BJ's Wholesale Club (BJ) beat the Street and boosted its full-year earnings guidance.

Energy stocks like National Oil Well Varco (NOV) outperformed the broader markets as crude oil settled at a fresh six-week high amid a bullish inventory report and an ugly session for the greenback. New government data showed crude stockpiles tumbled by 2.1 million barrels last week, three times as much as analysts had forecasted. Crude settled at $62.04 per barrel, up $1.94, or 3.23%.

Copper prices were also on the rise, continuing their 50% surge from January. The rally helped boost materials stocks like U.S. Steel (X) and Newmont Mining (NEM).

Corporate Movers

Chrysler LLC received approval from a bankruptcy judge to increase its DIP financing from the U.S. to $4.96 billion, up from $4.1 billion. The auto maker said C. Robert Kidder will succeed Robert Nardelli as chairman after it completes its alliance with Fiat.

Deere (DE) posted a better-than-expected 38% tumble in quarterly earnings as the world’s largest maker of farm equipment saw its revenue slide 17%. The company also cut its full-year profit guidance below expectations.

GMAC LLC is poised to receive as much as $7.5 billion in capital injections from the U.S. as early as Wednesday, the Detroit News reported. The new capital, which comes on top of $5 billion injected in December, could give the U.S. a majority stake in the auto finance company, the paper reported.

General Motors (GM) said it expects three bids for its European operations, which includes the core German Opel brand, by Wednesday’s deadline. Possible suitors for the unit include Italian auto maker Fiat, Austrian-Canadian auto parts supplier Magna International (MGA) and RHJ International, a European buyout firm, the Journal reported.

Toll Brothers (TOL) disclosed a 51% dive in quarterly revenue, exceeding estimates. The luxury home builder said it believes that “more buyers are beginning to enter the housing market” thanks to low interest rates, improving consumer confidence and affordability.

Hertz (HTZ) saw its shares tumble 17% a day after the car-rental company unveiled plans to sell 40 million common shares in an effort to slash its debt.

Invesco (IVZ) priced a $400 million stock offering at $14 per share, matching the mutual-fund manager’s closing price on Tuesday.

SolarWinds (SWI) became the sixth-straight initial public offering to see its stock jump in its debut. The software company raised $151.5 million, making it the first tech IPO in the U.S. in nine months.

Global Markets

European stocks ended mixed as London's FTSE 100 sank 0.31% to 4468.41, France's CAC 40 rose 0.87% to 3303.37 and Germany's DAX gained 1.60% to 5038.94.

In Asia, Japan's Nikkei 225 rose 0.59% to 9344.64 while Hong Kong's Hang Seng tumbled 0.39% to 17475.84. China's Shanghai Composite fell 0.94% to 2651.41.

Senate Passes Credit-Card Reform Bill by Vote of 90-5

Credit card reform legislation aimed at protecting consumers passed overwhelmingly in the Senate on Tuesday.

The bill, if approved by the House and signed into law by President Barack Obama, would block credit card companies from arbitrarily raising card holders’ interest rates and charging exorbitant fees.

Critics of the industry have argued that credit card companies have engaged in a pattern of exploiting vulnerable consumers desperate for credit.

After months of bailouts for banks, car makers and now possibly insurance companies, the Senate, by a 90-5 vote, evidently saw credit card reform as a way to send a message to constituents that they matter, too.

Banking Committee Chairman Christopher Dodd (D-Conn.), said credit card company practices have amounted to “an assault on the American consumer that is growing by the hour.”

Consumer advocates applauded the Senate move.

“The Credit CARD Act will restore some much-needed fairness to a credit card industry that is largely out of control,” said Robert Borosage, co-director of the Campaign for America’s Future, an activist group. “For far too long, credit card companies have exploited their own customers with misleading information and usurious interest rates.”

The House is expected to approve the bill later this week, and Obama could sign it by the end of the week.

The legislation gives the credit card industry nine months to change the way it does business: Lenders would have to post their credit card agreements on the Internet and let customers pay their bills online or by phone without an added fee. They’d also have to give consumers a chance to spare themselves from over-the-limit fees and provide 45 days notice and an explanation before interest rates are increased.

Some of these changes are already on track to take effect in July 2010, under new rules being imposed by the Federal Reserve. But the Senate bill would put the changes into law and go further in restricting the types of bank fees and who can get a card.

For example, the Senate bill requires those under 21 who seek a credit card to prove first that they can repay the money or that a parent or guardian is willing to pay off their debt if they default.

The legislation would not cap interest rates as some lawmakers had hoped. It also wouldn’t prevent lenders from finding new ways to drain customers' bank accounts or keep consumers from spending money they don't have.

But it would give spenders more flexibility and outlaw many of the surprise costs associated with credit cards at a time when money is tight in most households. For example, under the bill, a cardholder would have to opt to be allowed to go over a credit limit. If customers don’t agree and the bank authorizes a charge that would push them over their limit, the lender couldn't levy an over-limit fee.

Another benefit for consumers is limiting a practice known as "universal default," when a lender sharply increases a cardholder’s interest rate on an existing balance because the customer is late paying that bill or other, unrelated bills. Under the new legislation, a customer would have to be more than 60 days behind on a payment before seeing a rate increase on an existing balance.

The banking industry opposed the overall measure and said it could restrict credit at a time when Americans need it most. Banking officials defended their existing interest rates and fees on grounds that their business -- lending money to consumers with no collateral and little more than a promise to pay it back -- is very risky.

Writing in the Wall Street Journal , Mark Calabria, director of financial regulation studies for the Cato Institute, said the new laws would force consumers who need credit to turn to nefarious lenders.

“Credit cards allow the un- or under-employed to spend now out of future expected income. To limit credit solely to the financially stable leaves those most in need outside of our formal financial system, instead forcing such households to borrow from less efficient, and often more costly, sources, such as friends and family, or pawn-shops and loan sharks,” Calabria wrote.

Quiet Summer on Wall Street? Not So, Experts Say

In any other year -- one that didn’t come amid a historic crisis -- summer on Wall Street is usually quiet, with lower-than-average volumes combined with a traditionally somewhat-flat stock market.

But with the banks beginning to find some sort of a footing in this recession, the bank “stress tests” over and stocks up 30% from their early March lows, investors said they expect stocks to continue to move modestly higher over the summer as Wall Street preps for hopefully some sort of a modest economic recovery later this year.

Marc Pado, chief market strategist with Cantor Fitzgerald, said he does not see stocks falling back to March levels, barring some yet-unknown economic or financial catastrophe. The “perfect storm” of banking fear and record hedge-fund redemptions that pushed the Dow to the 6000 level could be hard to duplicate again.

“In March, we were looking at the nationalized banking system, and stocks reflected that,” Pado said. “We would need to have a whole new crisis for us to return to those levels.”

One probable reason why stocks could trend higher is increasing risk tolerance by traders and investors -- as seen in the recent run up in stocks -- and the large amounts of cash that still has yet to return to equities.

According to a research report by Bank of America-Merrill Lynch, even with the market jumping since March, institutional investors are sitting on $3.56 trillion in cash or money market funds, which represents 39% of the total market capitalization of the U.S. stock market. While that figure is down from over 50% earlier this year at the height of the financial crisis, it is still well above the 10% to 20% cash position held during a bull market or even the 2001 or 1991 recessions.

“Cash is a potential future source of demand for U.S. equities,” said Merrill Lynch analysts Mary Ann Bartels and Stephen Suttmeier in a note to investors.

With so much cash sitting there doing nothing, at some point that money on the sidelines will have to be put work doing something -- either through stocks, bonds, commodities or some other investment -- and it will most likely go back into stocks.

“There’s a lot of professional and amateur investors who missed the bottom and now have to do some performance chasing,” said Art Hogan with Jefferies. “They’ve remained defensive too long and now have to play catch up.”

One example of where the stock market has shown some pent-up demand is through the recent issuance of stocks and notes by the major banking names. Wells Fargo & Co. (WFC) and Morgan Stanley (MS) sold a combined $11 billion in common equity last week in two separate sales -- both of which boosted their initial offering after the sales were overallotted.

“If companies are able to raise money privately, stocks will continue to respond positively,” Hogan said.

There’s also been a trend of “less bad” economic data that hopefully will culminate with positive economic activity later this year. For example, investors are looking for manufacturing data to pick up in June, which will hopefully translate into positive shopping data during the back-to-school season.

“We’re in a much better place than we were three months ago, but we need to figure out where we stand in this cycle in the economy,” Hogan said.

Now, investors said they are looking for an economic recovery for 2009. Instead, because of all the massive cost--cutting corporations did earlier this year -- the U.S. economy has lost six million jobs in the past 12 months according to the most recent Department of Labor report -- a slightly positive economy could translate into somewhat decent profits.

“An economic recovery is too far out at this point to bet on, but companies have become so lean in this economy that even a (modest turnaround) would be huge to the bottom line,” Pado said.

In Tough Times, an Internet ETF Could Be Just the Ticket

Exchange-traded fund Merrill Lynch's Internet HOLDRS (HHH) is currently a good buy for investors interested in technology-oriented stocks, according to Kevin Mahn, Portfolio Manager of the The SmartGrowth Lipper Optimal Moderate Index (LPMAX).

During the recession, Mahn said, ETFs like HHH will be leaders as the economy transitions into a bull market. Because there is much recovery yet to be made in the economy, technology is a good bet.

Mahn cautioned that there was still time for a potential downturn in the second quarter, although HHH was holding strong.

“Companies are trying to emerge from a period of lower earnings and low capital earnings, and so the first place they are going to look is to technology to promote brand awareness,” Mahn said.

Because many companies will be emerging from “dormant sales” in the next 12 months, Mahn said that e-commerce was becoming a more cost-attractive and convenient way to reach one’s target market. As such, technology-heavy HHH is up by 27% already this year, Mahn said.

Mahn said that while many people will purchase their own technology stocks, it can often be time consuming -- like looking for a “needle in a haystack.” HHH affords investors to purchase “the whole haystack” without a lot of looking around.

“If you don’t have the time or expertise to know which Internet companies to buy, buying HHH allows you to invest in an index or a whole combo and get a guaranteed predictable rate of return.” Mahn said.

HHH typically holds a varied number of technology companies, that include names such as Amazon (AMZN) and eBay (EBAY).

LPMAX has somewhere between $10 million and $15 million in assets, and Mahn said that his company was allocating somewhere between 10% and 15% toward HHH and another technology-centric ETF, (SMH), which trades in the semiconductor industry.

In the past year, HHH has traded in a range of $23.20 to $59.56, and currently trades at $41.48, up by $0.56 or 1.37% in the last 24 hours.

Mahn said the one thing investors should be cautious of when investing in an ETF is that “not all ETFs are not created equally.” He said that because they trade differently, it will have an impact on tax consequences.

“These particular funds only trade in round lot increments of 100 shares, so you have to buy and sell in 100-lot increments, so for someone who has a less than robust strategy, they are fantastic and innovative products, but do your homework to find out what they are and any potential limitations,” Mahn said.

Rally Gains Steam as Dow Jumps 200

The Dow rose more than 200 points Monday afternoon, rebounding sharply from a rare ugly week, as Wall Street benefits from a rally in banking stocks and positive comments from Lowe's.

Today's Markets

As of 2:50 p.m. EDT, the Dow Jones Industrial Average jumped 205.33 points, or 2.48%, to 8473.21, the S&P 500 rose 22.05 points, or 2.50%, to 904.89 and the Nasdaq Composite picked up 44.14 points, or 2.63%, to 1724.28. The consumer-friendly FOX 50 added 16.29 points, or 2.50%, to 668.31.

The markets have been in the green throughout the session, recently hitting session highs. The positive start to the week comes as traders try to determine whether last week’s losses, Wall Street’s worst performance in ten weeks, was just a blip or the start of another leg down.

Haunted by a surprise drop in retail sales, the Dow tumbled 300 points last week, erasing a slice of its 2,000 point rally from early March. The Nasdaq Composite tumbled 3.4%, ending its nine-week winning streak.

“I think in certain [sectors] it was a sucker’s rally,” Peter Boockvar, equity strategist at Miller Tabak, told FOX Business. He said it was just a bear-market rally for the financial, retail and housing sectors as “the U.S. still has years to go in deleveraging.”

Almost all 30 components of the Dow were in positive territory during recent action, led by Bank of America (BAC), General Motors (GM) and Home Depot (HD). Defensive plays like McDonald's (MCD) and Johnson & Johnson (JNJ) struggled to escape negative territory.

The Nasdaq Composite was also sharply higher as traders snapped up tech stocks like Cisco (CSCO) and Apple (APPL).

Without any major economic reports released, much of the focus Monday was on Lowe’s (LOW), which beat the Street and announced better-than-expected earnings guidance. The company’s earnings of 32 cents per share easily topped estimates as its revenue slid 1.5% from a year ago.

Lowe’s raised its full-year earnings guidance, saying it has seen consumer confidence improve and “signs of a bottom in certain markets.” The commentary also boosted shares of Home Depot, which is set to report results Tuesday.

Meanwhile, the financial sector rallied more than 5% on a slew of positive analyst notes. Shares of Bank of America (BAC) jumped after Goldman Sachs added the company to its conviction buy list, pointing to its ability to earn its way out of the cycle.

At the same time, analysts at Citigroup upped their price target and earnings outlook on Goldman Sachs (GS), citing the bank’s strong capital and liquidity position and falling credit spreads.

“As the financials go, I suspect so will go the market,” NYSE trader Ted Weisberg of Seaport Securities told FOX Business. “It will be real interesting to see if the financials can regain their momentum.”

Boosted by a positive analyst note on Lennar (LEN) and new economic data, the home building sector was sharply higher Monday afternoon. For the second month in a row, the National Association of Home Builders confidence survey climbed higher, reflecting new optimism. The index climbed from 14 in April to 16 this month, its highest level since September.

Energy stocks like ConocoPhillips (COP) were also on the rise as crude oil rebounded sharply from its first weekly loss in the past three weeks. Crude closed up $2.68 per barrel to $59.02.

Corporate Movers

Wal-Mart (WMT) is revamping the electronic departments at its stores as the retailer looks to steal former Circuit City customers away from electronics leader Best Buy (BBY), The Wall Street Journal reported. Roomier and more interactive electronics displays that showcase the latest phones and computers are reportedly arriving Monday.

State Street (STT) said it plans to sell $1.5 billion in stock and notes to offset a $3.7 billion charge on asset-backed commercial paper conduits. The Boston-based bank also said it plans to sell non-FDIC backed notes in an effort to pay back its $2 billion TARP infusion.

General Motors (GM) received SEC approval to exchange $27 billion in unsecured bonds into common stock as the auto maker continues its efforts to avoid a bankruptcy filing, Dow Jones Newswires reported.

Lennar (LEN) saw its shares soar after Citigroup upgraded the home builder to “buy” from “hold,” citing valuation and a recent debt issuance, Dow Jones Newswires reported.

Pacific Ethanol (PEIX) said its units that own four ethanol production facilities have filed for Chapter 11 bankruptcy protection. Existing lenders have agreed to provide $20 million in DIP financing.

Boeing (BA) was upgraded by Goldman Sachs to “neutral” from “sell.” The firm also upgraded Rockwell Collins (COL) but cut Northrop Grumman (NOC), L-3 Communications (LLL) and Raytheon (RTN).

Global Markets

European stocks were up across the board asLondon's FTSE 100 rose 2.26% to 4446.45, France's CAC 40 rallied 2.41% to 3245.39 and Germany's DAX gained 2.42% to 4851.96.

In Asia, Japan's Nikkei 225 dropped 2.44% to 9038.69 while Hong Kong's Hang Seng gained 1.38% to 17022.91. China's Shanghai Composite rose 0.28% to 2652.78.

Also, India's benchmark Bombay Sensex jumped more than 17% overnight -- its largest one-day jump in 17 years -- after Prime Minister Manmohan Singh and his Congress Party won a solid majority in nationwide elections.

Cavuto: Big Spending In a Jam

Missed Friday's Cavuto ? Catch "The Deal" right here on FOXBusiness.com

Speaker of the House Nancy Pelosi (D-Calif.) might not like my saying this, but the worse things look for her, the better things look for you.

Not all of you.

But enough of you concerned about a government moving too far, too fast, and spending too much.

Here’s the deal:

The Speaker’s in a stew. Not good for Nancy Pelosi.

And not good for what had, only days ago, looked like a slam-dunk ambitious, lightening legislative agenda.

An agenda that would have produced a health-care package, financial-regulatory reform package, environmental-cleanup package, another stimulus package and, very likely, a nicely tied and bowed Supreme Court pick package –- all by July 31.

Then, out of nowhere, someone lost the package. All the packages.

Someone named Nancy. Not deliberately -– but clearly.

And suddenly, it’s no longer what government program will expand and when.

But what Nancy knew about torture, and when.

Now, not only does her legislative agenda look to be in doubt.

Surprisingly, so too Pelosi’s ability to be the one carrying it out.

I’m not saying she’s done.

I am saying, for the Speaker, things won’t be fun.

Her number two is calling for hearings.

Republicans are calling for blood.

And lots of average folks calling for answers.

Folks wondering how an $800 billion stimulus plan that was rushed through ain’t exactly rushng its way to us.

Only millions thus far –- and many getting that dough aren’t even alive.

You heard me right. Stimulus checks rushed to mailboxes of homes whose owners have left those homes – and, for that matter – this world.

Out-of-this-world crazy.

And folks are getting crazy mad.

At Nancy and what she knew and when.

And at Congress on spending so damn much, and why.

I’m not saying the big spending has stopped.

I am saying it has hit a major traffic jam.

Market Winners & Losers: Genworth Financial, Mylan

The major indices rebounded after Wednesday’s selloff despite a worse-than-expected report on weekly jobless claims. The Dow gained 0.6%, the S&P 500 moved up 1% and the Nasdaq increased 1.5%.

Here are Thursday’s winners and losers:

Winners

Genworth Financial Inc. (GNW)
Positive news from Raymond James pushed shares of the insurer up 20.2%, leading the rest of the insurance sector into positive territory. GNW last traded at $4.99, a gain of 84 cents.

Hartford Financial Services Group Inc. (HIG)
Another winner in the insurance sector, Hartford Financial’s stock moved to the upside by 17.4% on Thursday. Shares closed the session at $14.75, a gain of $2.19 on the day.

Office Depot Inc. (ODP)
Office Depot rebounded from Wednesday’s loss, gaining 51 cents, or 16.7%, to settle at $3.57.

American International Group Inc. (AIG)
The insurance giant benefited from the GNW news, with shares soaring 15%. The stock closed up 24 cents to settle at $1.84.

Lincoln National Corp. (LNC)
One of many life insurers that gained big Thursday, the stock added 12.6%, or $1.82, to settle at $16.24.

Losers

Mylan Inc. (MYL)
MYL shares fell 5.5% after an analyst downgrade Thursday. The stock closed the session with a 74 cent-loss, with shares settling at $12.67.

General Motors Corp. (GM)
Bad news from the big cheese – CEO Fritz Henderson’s comments that bankruptcy is ‘probable’ helped sink GM’s stock by 5% on Thursday. Shares closed at $1.15, a loss of a nickel.

Advanced Micro Devices Inc. (AMD)
The semiconductor-maker continued its volatile trading, with shares ending 3.2% lower on Thursday. AMD shares fell 14 cents, settling at $4.24.

Dr. Pepper Snapple Group Inc. (DPS)
Shares of the drink manufacturer fell 3.2% after beating the streets in first quarter earnings just yesterday. It closed the session down 70 cents to $21.37.

TJX Cos Inc. (TJX)
TJX spiked up at the open but fell 2.7% to end the day as retail woes set in. The stock ended Thursday down 75 cents, with shares settling at $26.85.

Union Sets Up Hotline for Small-Business Owners, Workers

Small-business owners and employers discontent with the “reckless lending” practices of bailed-out banks now have an outlet for their outrage.

On Thursday, the Service Employees International Union, or SEIU, launched a toll-free hotline and Web site in the hopes of offering support to those who face job loss as taxpayer-funded banks continue to freeze loans and threaten to liquidate small businesses.

The SEIU’s new program, officially called Keep America Working, was developed as a response to the recent “sit in” actions at factories where workers are losing their jobs, or are at risk of losing those jobs. It is aimed to provide resources for workers aiming to save their jobs. The SEIU has also assembled a team devoted to helping concerned workers connect with community activists and elected officials.

“Liquidating small businesses is a far cry from putting the economy back on track. It’s time big banks make good on their promise to restore lending and become partners, not adversaries,” Andy Stern, president of SEIU, said in a release.

The SEIU’s new hotline number is 877-286-1JOB and will be accessible Monday through Friday from 8 a.m. to 6 p.m. ET. The new Web site is www.keepworkinghotline.org.

Market Winners & Losers: Pfizer, GM

Tuesday ended with a mixed market as the Dow pushed out a 0.6% gain, while the S&P lost 0.1% and NASDAQ dropped 0.9%.

Here are Tuesday’s winners and losers:

Winners:

CME Group Inc. (CME)

CME got a boost from a rise in oil that crossed the $60 a barrel price during trading as it gained 7%. It closed up $16.95 to $258.48.

CIT Group Inc. (CIT)

CIT closed after another day of volatile trading to the upside of 6.6%. The regional bank last traded up 20 cents to $3.22.

Flour Corp (FLR)

Despite lowering yearly guidance, the construction company Flour Corp watched its first-quarter earnings rise 50%, helping shares continue their climb. The stock ended up 5.7%, or $2.45, to $45.66.

Pfizer Inc. (PFE)

A credit Suisse analyst said that upon completion of the Wyeth deal, Pfizer will up its dividend, which pushed the stock up 5.5% Tuesday. It closed the session up 78 cents to $14.93.

Monsanto Co. (MON)

The world’s largest seed manufacturer reached an agreement on a patent dispute with DuPont as it gained 4.8%. MON closed up $4.12 to $90.08.

Losers:

General Motors Corp. (GM)

The big auto maker’s stock fell to prices not seen since before World War II during trading as executives within the company sold off massive amounts of stock. It closed down 20.1%, or 29 cents, to $1.15.

Ford Motor Co. (F)

Shares of Ford fell 17.6% after the company announced it’s going to sell $300 million in stock to avoid another capital injection by the government. It last traded down $1.07 to $5.01.

SunTrust Banks Inc. (STI)

SunTrust fell another 12.4% while the company continues to try to raise money by selling large quantities of stock. It ended down $2.30 to $16.21.

MBIA Inc. (MBI)

MBIA’s stock shot up at the beginning of trading but could not hold the gains throughout the session as it closed down 11.8%. MBI ended Tuesday with a loss of 82 cents to $6.14.

E*Trade Financial Corp. (ETFC)

The online financial services provider continued its slide, falling another 10.7% Tuesday. ETFC last traded down 19 cents to $1.59.

Crude Climbs Despite Demand Forecasts

Oil closed higher Thursday despite a report from the International Energy Agency in which the agency cut its estimates for worldwide daily crude use in light of the lingering economic downturn.

Oil / Energy Markets

Oil futures for delivery in June rose 60 cents, or slightly more than 1%, to $58.64 a barrel in New York.

In a report issued Thursday, the IEA cuts its daily consumption estimate for oil by 230,000 barrels to 83.2 million barrels per day, compared to last month’s forecast by the agency.

According to the IEA, the agency expects that oil use will fall in developed nations by 5.1% while developing economies such as Brazil, China and Russia will also have considerable weakness in 2009.

Overall, the agency sees oil demand worldwide being at its weakest since 1981.

“Global crude runs would remain depressed compared to the five-year historical range due to the weaker demand,” said the IEA.

Today’s report from the IEA comes on the heels of a report yesterday from the U.S. Department of Energy, which showed that oil inventories fell 4.63 million barrels to 370.6 million last week -- the highest stockpiles since 1990.

Oil has been posting strong gains in recent weeks on the heels of some economic reports that have shown some modest progress in the state of the overall economy. After toying with the $30-a-barrel mark three months ago, oil topped the $60 mark this week only to pull back moderately.

Natural gas futures fell by 3.1 cents, or 0.78%, to $4.297 per million British thermal units.

Metals

Gold added $2.50, or 0.27%, to $928.00 a troy ounce, up for the third straight day.

Silver futures rose by 2 cents to $14.02 an ounce, up for the second day.

Copper futures, which more closely track industrial demand, fell by 0.2 cents to $2.0350 a pound -- the sixth day in a row they’ve fallen.

Market Winners & Losers: Dynegy, NVIDIA

The good, the bad, and another rally. The markets moved up Friday as jobless claims came in below analyst estimates and a there was positive reaction to the stress test results that broke after trading yesterday. The Dow moved up 1.96%, S&P gained 2.41%, and NASDAQ finished the session up 1.33%.

Here are Friday’s winners and losers:

Winners:

Fifth Third Bancorp. (FITB)

Fifth Third skyrocketed the day after the stress test results reaffirmed the financial sector. FITB closed up 58.8% to $8.49, a gain of $3.14.

Dynegy Inc. (DYN)

DYN moved up 36.8% on the rise in natural gas. It last traded at $2.38, up 64 cents.

Huntington Bancshares Inc. (HBAN)

The regional bank issued $120 in common stock along and benefited from a boost in the sector to increase 33.7%. HBAN ended the session at $5.20 up $1.31.

Marshal & Ilsley Corp. (MI)

Here is another financial that gained after the government released its stress test results. MI closed up 27.5% to $9.82, a gain of $2.12.

Zions Bancorp (ZION)

Among the S&P’s big winners, ZION gained 27.1% on stress test results, helping the bank continue to climb off its near-yearly lows. It finished Friday at $9.82, up $2.12.

Losers:

NVIDIA Corp. (NVDA)

Computer graphic card manufacturer NVIDIA’s first quarter gross margin overshadowed earnings as the stock dropped 13.8%. It closed the session down $1.48 a, loss of $9.25.

Allstate Corp. (ALL)

First-quarter losses pushed the insurer down 5.4% amid capital concerns. The stock last traded at $26.12, down $1.48.

Microchip Technology Inc. (MCHP)

Sales in the fourth quarter for Microchip Technology dropped, pushing shares of the company lower by 5.1%. It ended the week down $1.16 to $21.51.

Broadcom Corp. (BRCM)

News that an Emulex offer for the company had gone sour cost shareholders 5.1% Friday. The semiconductor maker last traded at $21.55, a loss of $1.15.

SanDisk Corp. (SNDK)

SanDisk closed the week on a down note, bucking the sector trend as it lost 5%. SNDK closed Friday at $14.07, down 75 cents.